Venezuela, ALBA, and the Limits of Postneoliberal Regionalism in Latin America and the Caribbean

Asa K. Cusack

• Publisher: Palgrave Macmillan
• Year: 2018
• Print ISBN:
  9781349950027
• eBook ISBN:
  9781349950034
• Topic: Politics & International Relations
• Subtopic: American Government
• Index: Politics & International Relations

Enriches understanding of the Bolivarian Alliance for the Peoples of Our America (ALBA) in South America, discussing its function and impact

Includes case studies that illustrate the difficulties which ALBA projects have faced

Highlights the uncertain future of ALBA

© The Author(s) 2019

Asa K. CusackVenezuela, ALBA, and the Limits of Postneoliberal Regionalism in Latin America and the CaribbeanStudies of the Americashttps://doi.org/10.1057/978-1-349-95003-4_1

Begin Abstract

1. Approaching Venezuela, ALBA, and Postneoliberalism

Asa K. Cusack¹

(1)

Latin America and Caribbean Centre, London School of Economics and Political Science, London, UK

Asa K. Cusack

End Abstract

The story of Venezuela, ALBA , and postneoliberal regionalism in Latin America and the Caribbean is one of spilt milk.

At 4:30 a.m. on a smallholding nestled beneath the Cayambe volcano in northern Ecuador, a family of dairy farmers gather their cattle for milking. The herd is bigger than it was, thanks to a small loan from a local finance cooperative , and they can produce enough for themselves plus a little bit more. Along with their neighbours they sell excess production to a local storage collective, gaining a steady income through regulated pricing. Until their children graduate from secondary school, this extra income will be complemented by $50 from a conditional cash transfer programme, allowing them to consider taking on a farmhand, upgrading their equipment, or improving their living conditions. They are not directly involved in politics, but they feel more included and supported than they used to.

As local production has increased, the storage collective has begun to explore export opportunities. Officials from the Ministry of Agriculture and the new Directorate of Inclusive Commerce highlight unmet demand in Venezuela, offering to facilitate access to potential import partners. There are inevitably ideological differences between the two governments, but there are also many commonalities in development strategies and foreign policy, so officials are eager to strengthen trade relations. Improving the lives of local people is their priority, but if this also provides Venezuela with a dependable, affordable source of a product in short supply, the benefit becomes mutual. Pressure to identify such win-win situations has always been strong under President Correa , but it has only increased since Ecuador joined the Bolivarian Alliance for the Peoples of Our America (ALBA), which advocates creation of a cooperative , complementary “economic zone of shared development”. The same officials even informed the collective about a new ALBA virtual currency called the SUCRE that will allow them to export to Venezuela quickly and easily, with lower transaction costs, and backed by the Ecuadorian Central Bank. “If the system is successful here”, they said, “other countries might sign up, which would mean more demand for your products and bigger foreign-exchange savings for all of the countries involved”.

Their commercial partner in Venezuela is a state distributor providing foodstuffs to social programmes and state-subsidised shops in poor neighbourhoods. Its buyers are pleased to find a regional supplier of a vital product that can be hard to source locally, even after a major dairy producer was nationalised. Thanks to the SUCRE initiative, local currency can be used, making the transaction cheaper, while top-down pressure should also expedite clearance by the bureaucratic Foreign Exchange Commission (CADIVI). The company’s directors know their superiors at the Ministry will be happy: they have been directed to favour regional partners over extra-regional ones, especially where precious foreign exchange can be saved by using the SUCRE .

Once the Ecuadorian milk arrives, the distributor allocates it to a small Mercal (Food Market) store in the barrio of Catia, in western Caracas. The store’s employees have been asking for supplies since stocks ran out a week earlier, and the local communal council has also been in touch. If shortages spread, the officials responsible for the Mercal at the state oil company will get it in the neck from President Chávez , so this problem is also a priority for them. There are elections around the corner, and the ruling party knows nothing is more damaging than disruption to social programmes like Mercal that have made a real difference to supporters’ lives. Chávez and his development planners also know that Mercal’s subsidised staples mean better nutrition for many families, as well as time or money freed up for involvement in empowering community education programmes or neighbourhood politics. And because the milk comes from small producers in friendly Ecuador rather than hostile corporations at home or abroad, there is less chance that any dependence will be wielded as a political weapon against their administration.

Ultimately, a Catia resident will chance upon the milk on the way home from work and be relieved to see it back in stock. That means neither having to waste time queuing for it elsewhere nor being forced to pay more to resellers or in a private supermarket. He remembers all too well how bad things were in the late 1980s, and despite problems with public services, he feels much more positive about his situation now. His wage may be low, but he recently received title deeds to the house he has occupied for years, plus he and his family have access to free medical care and education. Chávez is not perfect, but opposition politicians neither understand nor care about his life.

This transnational chain of people, policies, and prospects is the political economy of ALBA’s postneoliberal regionalism writ small: a poor Ecuadorian farmer’s life is improved by his ability to improve the life of a poor Venezuelan barrio-dweller. Writ large, it involves two prominent governments of Latin America’s “Left Turn” (1998–2015) leveraging regional governance to reinforce common preferences for endogenous development, reassertion of autonomy, and empowerment of long-marginalised constituencies. Throughout the “postneoliberal” period, this vision of mutually reinforcing cooperative development was important to activists and academics alike. Both saw a return to regionalism as a central characteristic of the novel development models of the New Left. And understandings of this new wave of regionalism were shaped more by ALBA than by any other regional project. For some, it even became a beacon of hope for contestation of neoliberalism at a global level.

The problem is, the milk was spilt.

The details are imagined, but the transaction is real enough—until it reaches the Venezuelan border. In reality, the milk was held up there for days while customs officers—either overloaded or expecting “a little something for the sodas”—completed the necessary paperwork.¹ By the time it reached Venezuela’s public food distributor it had gone off, so they refused to pay for it. The smallholder in Ecuador had already been paid by the local storage collective, but given these unexpected complications, they would think twice about exporting again. Since Ecuadorian development aimed to promote the social economy both to diversify exports and to combat poverty, the government reluctantly absorbed the loss.² But like the exporting producer, officials would think twice about promoting future ventures involving Venezuela, particularly via the SUCRE : it was supposed to reduce transaction costs but instead had raised them. In the small world of regional technocrats and businessmen, this stoked the existing distrust of regional initiatives backed by left-of-centre governments, not least those within ALBA.

This work is about the nature, origin, and impact of these differences between ALBA in theory and ALBA in practice. If ALBA has been seen as an integral part of its members’ postneoliberal development and a radical alternative to neoliberal regionalism, then what do real-world contradictions and complications say about these processes? Which characteristics of its member-states, the regional context, and the global order led to this divergence? What did it mean for the Left’s attempts to consolidate power in the twenty-first century? What were the internal and external challenges facing these post- and anti-neoliberal governance projects? And were their collective regionalist endeavours even “postneoliberal” at all?

Contrary to the popular dictum, there is a lot to be gained from crying over ALBA’s spilt milk.

Approaching Venezuela and ALBA: The Core of the Left Turn in Latin America and the Caribbean

Put simply, ALBA is a regional governance project that emerged in opposition to US-backed attempts to institutionalise free trade across the entire hemisphere via the Free Trade Area of the Americas (FTAA ). With the FTAA defeated in 2005, ALBA morphed into an attempt to reinforce member-states’ pro-social, autonomist, state-led development strategies through the cooperative pooling of regional strengths. It has 11 members and spans Andean South America, Central America, and the Caribbean (see Fig. 1.1):

• Venezuela and Cuba (since 2004)
• Bolivia (2006)
• Nicaragua (2008)
• Dominica (2008)
• Ecuador (2009)
• St Vincent and the Grenadines (2009)
• Antigua and Barbuda (2009)
• St Lucia (2013)
• Grenada (2014)
• St Kitts and Nevis (2014)

Fig. 1.1

Geography of ALBA membership. Source: Author’s elaboration using an outline provided by Free Vector Maps, http://​freevectormaps.​com

ALBA’s flexible attitude to participation has seen a proliferation of initiatives at all levels of governance and extending even into non-member-states. Its core initiatives, however, are regionalised social programmes in health and education (social “missions ”), a soft loan scheme for energy-dependent states of the Caribbean basin (Petrocaribe), an alternative trade framework for facilitating cooperative commercial agreements (the People’s Trade Agreement), state multinational companies (grandnational enterprises), a virtual currency permitting intraregional trade without use of the US dollar (SUCRE ), a development bank providing productive investment (the ALBA Bank), and a region-level Social Movements Council allowing unprecedented bottom-up involvement in regional governance.

The problem is, ALBA has rarely been put simply. Like its founders Venezuela and Cuba, ALBA has been for some a source of inspiration and for others a source of dre...

Table of contents

• Cover
• Front Matter
• 1. Approaching Venezuela, ALBA, and Postneoliberalism
• 2. Getting to Grips with ALBA’s Brand Governance
• 3. The National Roots of ALBA
• 4. The People’s Trade Agreement (TCP)
• 5. The Unified Regional Compensation System (SUCRE)
• 6. Petrocaribe
• 7. Venezuela, ALBA, and the Limits of Postneoliberal Regionalism
• Back Matter